Recently, the government relaxed income tax rules to allow primary or first sale of housing units of up to Rs 2 crore at a price that can be 20 per cent below the stamp duty circle rate.
Housing and Urban Affairs Secretary Durga Shanker Mishra on Wednesday said the government will soon come out with the model tenancy law, giving a major boost to real estate sector especially rental homes. The ministry had in July 2019 floated the draft model tenancy law.
Addressing a webinar organised by realtors body NAREDCO, he said the government’s Affordable Rental Housing Complex (ARHC) scheme for migrants, which was launched few months ago, has been progressing well and the programme has the potential to stop creation of slums in cities.
Mishra said the housing sales have revived after unlocking of the economy on the back of several measures taken by the Centre as well as state governments.
He said some states like Maharashtra and Karnataka have reduced stamp duty on registration of properties to boost sales.
The secretary said the Centre had advised all States/UTs to cut stamp duty for giving filip to the housing segment.
“Model Tenancy law is ready. It has been translated into various languages as it has far reaching implications,” Mishra said.
The deadline for feedback on the proposed model tenancy law ended on October 31 and now States have been asked to send those feedbacks after compiling it, he said.
The secretary said the model tenancy will come “very soon”.
Mishra pointed out that 1.1 crore homes were vacant as per 2011 census as people fear to give their homes on rent.
The model tenancy law will eliminate anomalies and give a boost to real estate sector, he said.
The Centre will send the Model Tenancy Law, after approval from the Union Cabinet, to States for its adoption. The draft model tenancy law proposes that landowners will have to give a notice in writing three months before revising rent. It advocated appointing a district collector as rent authority and heavy penalty on tenants for overstaying.
On the ARHC scheme, Mishra said the initial response has been very encouraging and the already completed units have been handed over in cities like Surat and Chandigarh.
“This scheme is the answer for ending slums in the country. No one wants to live in slums,” he said.
Talking about the Rs 25,000-crore stress fund to complete stuck real estate projects, Mishra said around Rs 13,000 crore has been committed so far in 135 real estate projects, which would benefit 87,000 homebuyers.
He said the government is regularly reviewing the progress of this stress fund — Special Window for Affordable and Mid Income Housing (SWAMIH).
The secretary asked builders to take advantage of recent tax relief announced by the government in clearing their unsold inventories.
Recently, the government relaxed income tax rules to allow primary or first sale of housing units of up to Rs 2 crore at a price that can be 20 per cent below the stamp duty circle rate. Earlier, the law restricted differential between circle rate and agreement value at 10 per cent.
The secretary complimented realtors bodies NAREDCO and CREDAI for creating their own online platforms for property sales and asked them to promote them as well as take feedback from people.
He said these two platforms could become Amazon of real estate with e-commerce becoming popular among young generation.
Mishra said Indian real estate sector not only contributes in the country’s GDP but is a major employment generator. It creates demand for 250-300 ancillary industries.
He emphasized on skill improvement and use of modern technologies for faster completion of construction works.
NAREDCO Chairman Rajeev Talwar and President Niranjan Hiranandani thanked the central government for helping the sector in tiding over the crisis.
Rajan Bandelkar, Vice Chairman, NAREDCO West and Ashok Mohanani, President NAREDCO West also highlighted several steps taken by the Centre and Maharashtra government to boost demand.